There was a perfect Gartley pattern that could be observed for EURUSD today.
One leg up, two legs down. The second leg down stopped just below the 61.8% retracement target. You can see what happened afterwards.
The Gartley pattern is the easiest to understand. One impulse (trend) wave up, followed by a two-legged correction, which showed that the bears needed two attacks to drive price down just by about 64%.
If you watch out closely, you can see the little butterfly on the lower right corner within the Gartley pattern. The second chart shows a 1 min chart of EURUSD.
Last edited by Fat Tails; April 9th, 2010 at 03:57 PM.
Reason: Chart size reduced
The following user says Thank You to Fat Tails for this post:
Thank you for showing us another tool in this Harmonic World.
Fat Tails and TraderJesse,
Thank you for bringing back life into this thread.
My intention was from the beginning to put it out there in order to show people how to apply this and how to integrate it into their trading.
My approach reached only to include the AB=CD pattern and all it's rules. It is the basics upon which all the patterns are built.
I'd appreciate it very much if people would keep the spirit of the thread, and keep on presenting material that has an educational essence. By saying that it doesn't mean that we should keep out of posting Harmonic stuff. Please post those things, but try to do your best in order to keep it educational.
We all struggle to make tomorrow look like yesterday!
Get rid of your past and let the future unfold from the now. Past performance is not indicative of future results.
I promised to keep the thread alive and post as I have time. Unfortunately I've lacked time for posting, and I'm sorry for that. But here's a parenthesis:
A small repetition:
AB = CD 60% of the time.
That tells us that the relations are equal. Relations = such factors as
time (amount of bars)
price (amount of ticks)
CD = an extension of AB based upon the following numbers
40% of the time.
That tells us that if the CD leg is passing the 100% of AB we're going to look for the next level, which is based upon those numbers presented above.
(Remember this, because it is very important, and it's going to give you very much higher edge than normal)
After the BC leg is finished (and you know that by expecting the ,382 or ,50 levels in case the move is fast, otherwise ,618 or ,786 the more normal numbers) , start looking for clues directly as the CD leg starts to shape. And the clues for an expansion are:
Let's try and put some life back in to this thread. I've just downloaded the latest Kor Harmonics Indicator for Metatrader. It's very very nice. I have always been a fan of Zup I have numerous versions the latest being V82. However, this Kor Indicator picks up a lot more patterns namely 5-0, 3 drives, one2one's and AB=CD's. It also identifies Head and Shoulder patterns too.
My method of trading these patterns is fairly simple. I basically look for the pattern to occur at a fib retracement or projection from a much larger swing. I look for patterns on H4 and taking levels from the Weekly and Daily.
I set an order at the level (ignoring price action) with a tight stop and that is pretty much it.
I've tried incorporating the Hurst Exponent with the patterns but am not convinced that this method works for me.
Is anyone using Hurst with these patterns ??
If anyone fancies a chat on Skype regarding Harmonic trading feel free to hit me up...Username: ceydababy1
The following user says Thank You to cb77 for this post: